The Unz Review: An Alternative Media Selection
A Collection of Interesting, Important, and Controversial Perspectives Largely Excluded from the American Mainstream Media
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Monopoly Is the New Normal
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CNN is happy to report more bad news that can help the presstitutes unseat President Trump:

“Mass unemployment. Surging bankruptcies. An unprecedented health crisis. It’s going to be really ugly. Here come the big bank earnings.”

The report has interesting information that CNN doesn’t seem to have noticed. CNN reports that banks are in trouble because of low interest rates. But don’t banks pay low interest rates and charge high rates? Interest on credit card balances is 19%, and if you miss a payment the interest rate can rise to 29%.

CNN reports a S&P Global Ratings estimate of $2.1 trillion in credit losses due to the pandemic and says the five largest US banks have set aside $35 billion against loans expected to go bust.

That is not much of a cushion for the loans of our five largest banks. Unless rules have changed and I am mistaken, bank reserves are an offset to profits. If the five banks expect $35 billion in profits and put that amount in reserves, they have no profits to report and no taxes to pay. Later when they need a stock price boost, they can stop adding to reserves, and their earnings will show a big jump.

There is another interesting point in the CNN report that went unnoticed. Because of various scandals and penalties, Wells Fargo is currently prevented from growing its balance sheet. In other words a hold has been put on its size and the bank is prohibited from acquiring more assets to offset its losses. Could the Federal Reserve be setting up Wells Fargo for a takeover by one of the New York Banks? A bank that can’t grow its balance sheet is not in a good position to remain independent.

In my youth US economic policy focused on preventing concentration of economic activity. No more. Concentration is the new normal. In the US the five largest banks have about half of total bank assets. Media ownership is concentrated in 6 corporations. Big Box chains have taken over from independent businesses. Amazon is an online retail monopoly. Google, Facebook, and Twitter are essentially monopolies.

We have gone from monopoly is bad to monopoly is good. Anti-trust, once an area of economic study, seems to have disappeared from the curriculum and from federal regulation.

(Republished from by permission of author or representative)
• Category: Economics, Ideology • Tags: American Media, Monopoly